Article

How to Use Third-party Delivery Service to Promote Your Concept

Independent operators used to view third-party delivery as a necessary evil, something they had to use to stay relevant. The pandemic upended this perception, when third-party delivery tools provided a lifeline for restaurants that were forced to pivot from on-premises to off-premises dining. Now, many restaurant operators like Donald Minerva, who owns Scottadito Osteria Toscana in Brooklyn, know they need to be on third-party delivery apps, since that's where new customers discover local restaurants. But they're also finding ways to leverage those steep commissions to work in their favor -- as marketing channels that broaden their reach and generate direct phone or online orders.

With the right attitude and a willingness to own your digital customer experience, you too can turn the third-party delivery apps into customer recruitment tools and get your message "on a roll".

In this article, we explain how independent operators like Minerva have hacked the third-party apps to increase direct orders, recapturing revenue that was previously going to the apps in the form of commissions and fees.

Make it Easy to Order Directly

"Before you can convert people from third to first-party, you have to own the experience," David 'Rev' Ciancio tells Upserve. Owning the experience closely parallels the elements of digital hospitality, which we've talked about before. As a refresher, Matt Vannini, CEO and Founder of RASI, Restaurant Accounting Services Inc, defines digital hospitality as using available technology tools to create an enjoyable experience for guests. Within the delivery process, owning the online experience means:

• Making sure that your online menus (and prices) are up to date.
• Updating your hours of operation.
• Replacing stock imagery with actual photos of your menu items so customers know what they're ordering.
• Updating your Google My Business listing to reflect an accurate online ordering URL, phone number, website, etc.
• Updating your business information in reputation management tools, like Yelp, Yext, or Marquii.
• Updating your website to show how customers can order from you directly, be it online, over the phone, or via a combination of methods.

In addition to these housekeeping elements, consider digital storytelling. What are customers getting when they choose to order from you instead of the apps? Why choose your concept instead of a local competitor? By telling your story, you differentiate your brand in the crowded online marketplace. Done right, you'll attract guests who deeply want what you have to offer--ones who are primed to hear your messaging on direct orders.

Digital housekeeping is a necessary first step in using the apps to drive direct orders. Customers rely on third-party delivery apps because they're intuitive, easy to use, convenient and transparent. To siphon off their business, you have to beat them at their game.

Ordering from independent restaurants can be easy and intuitive, but often as not there's no online ordering system, no updated menu, and no mention of how to put in to-go orders via website or phone. Customers then have to scan the menu and call directly to order items that may be pricier than what's listed on the menu if they're available. Your biggest fans may be motivated to do this legwork, but new-to-you customers will certainly not be, even if your food is amazing. When you make it just as easy, convenient and transparent to order from you directly, you'll increase the odds that customers will actually change their behavior to directly support your business.

Delivering an enhanced customer experience is somewhere independent restaurants have an edge, even if they don't think about the digital aspect of this, says Elizabeth Kelly, a marketing specialist with SpeedLine Solutions, which offers POS systems for pizza restaurants. "Your ordering site is part of your restaurant reality, which is lost on the third-party sites," Kelly explains. It's "important to have your branding, your colors, your images that fit your brand guidelines and things like that," Kelly says.

Ciancio encourages independent operators to think of third-party delivery apps in more of a neutral way, as a customer acquisition channel.

There are other ways to brand and customize the online ordering interface for a superior customer experience. Consider customization, something that's frequent for the pizza restaurants that tend to use SpeedLine Solutions. POS integrations with the online ordering system mean that prices and menu items are pulled in, so they're "always up to date," says Kelly. The online ordering system uses checkboxes so customers can build their own pizzas or ask for a dish to be made without a particular ingredient. These features make it easy for customers to get exactly what they want without having to read lengthy text descriptions or call to request a substitution.

A third-party delivery app may not have updated menus or pricing. And customers can't easily request a substitution or omission for dietary preferences. By building an online ordering system that reflects your brand and gives the customer choice, you can capture the advantage. Customers know exactly what they're going to get and exactly how much it costs.

With the third-parties, the guest experience can be subpar. Inaccurate or outdated menus and prices are two common complaints levied against the third party, late deliveries being another. Knowing their weak points, you can beat them at their game and secure customer loyalty.

Consider the legendary wait time for food delivery, an issue that impacts food quality. Operators have all heard horror stories, but few have taken matters into their own hands by taking charge of delivery. If you are willing to invest in a better delivery experience, you can beat the third-parties at their game, winning loyalty while providing an improved customer experience.

Kelly mentions a customer who cares about the delivery experience so deeply that they train drivers on customer service as an aspect of food delivery. "[They spend] weeks training their delivery drivers from the customer experience doing "ride-along". If a kid answers the door, [making sure they] treat the kid with respect [and not asking for the parents]," Kelly explains. Not every concept can handle deliveries in-house, but this makes sense for a pizza shop. Pizza delivery will always be a significant business driver. If it's something that makes sense for your concept, going above and beyond with the delivery part of the customer experience is another way to stand out.

Some markets allow operators to set different prices for menu items when they're ordered via third-party delivery. This sneaky tactic can be a win-win: if a customer orders from you, you get the business; if they order from the app, the higher prices they pay offset those hefty commissions. Setting two prices can encourage customers to order from you because it saves money. It bears a mention that your contract with the third-party delivery provider may prohibit different pricing structures, so not all operators can try this.

When concepts aren't allowed to raise prices, Kelly says she's seen restaurants offer special discounts for online orders that come through their platform. Others create loyalty programs that are only good for direct orders. These tweaks can help you push customers away from the apps and toward ordering directly from your business.

Another way to encourage direct orders is to limit the menu items that are listed on third-party apps, Kelly suggests. Many restaurants already do this with menu items that don't travel well. Limiting certain items to direct orders only redirects traffic from the apps and to your business, especially when you take customer favorites off the apps.

With the third-parties, the guest experience can be subpar. Inaccurate or outdated menus and prices are two common complaints levied against the third party, late deliveries being another. Knowing their weak points, you can beat them at their game and secure customer loyalty.

Once you've improved your online ordering and delivery experience, scrub mentions of the third-party apps from your concept. This may prevent customers from going directly to those sites to find you. Replace third-party marketing collateral with your own marketing collateral that explains the best way to order from you. Don't forget about little details, such as cling stickers on your door advertising a third-party or a voicemail that directs customers to order from an app instead of directly.

"The vast majority of our customers do not advertise that they are on third parties, they only advertise their own [website] and to order directly from them. If you find them on [the apps], that is great, but it's not what they're advertising," Kelly explains.

Asking for Direct Orders

While there are strategic reasons to stay listed on the delivery apps, many independent operators have found success through asking their customers to or- der directly from them. Ciancio recommends making one-third of your social media posts about online ordering to drive direct sales. A soft sell for online ordering might be a photo of a popular item with a mention that it's available for order online, with a link included. A hard sell might show the same photo with a direct message with a focused call to action. Explain why direct orders benefit your business (and why delivery orders are so harmful). Then ask them to buy.

Minerva regularly creates social media posts that encourage online or phone orders. The restaurant is active on Facebook, Instagram and Twitter. "We've had people come in and do some TikTok videos about us," Minerva says, encouraging other restaurant operators to use social media to remind their audience about direct orders. He believes that social media posts reach a broader audience outside of the immediate neighborhood.

To track the efficacy of social media posts in driving orders through your system instead of the apps, Ciancio recommends link shorteners. These allow you to create a custom shortlink, which is trackable. For every hard sell social media post, create a custom shortlink. Then use analytics to track click throughs. If five customers use that shortlink to put in an online order, then you know that post converted five customers who might've ordered from the apps.

Once you're converting customers, Ciancio recommends using email segmentation to keep them engaged -- and ordering directly from you. Reports provide at-a-glance intelligence into your custom- ers, so you can tell who orders a pizza every Friday versus who orders your family special once a month. A customer who always orders pizza isn't likely to redeem a coupon for a family meal and vice versa. Email segmentation allows you to target your cou- pons accordingly, so offers go to the customers who are most likely to redeem them. Sending targeted coupons matters because the third-party apps dangle coupons in front of customers to keep them engaged. As with digital housekeeping, borrowing from their playbook helps you meet customer expectations while diverting revenue to your business.

Social media is a convenient way to reach diners on their devices, but don't overlook other media channels for advocacy. Minerva proactively encourages direct orders through an old-school method of direct mail. "We sent flyers out by mail to several thousand occupants in the adjacent two-mile radius," he says.

Shawn Walchef, operator of Cali Comfort BBQ and host of the Digital Hospitality podcast, knows that local media and diners are hungry for stories about restaurants, particularly when there is a feel-good element. To capture media attention for your concept, write an op-ed for the local newspaper. Do a radio or television interview. Consider who you know in your community who can help spread the word about supporting your business directly, whether it's by dining in or ordering food delivery. Whenever you seek out publicity for your concept, plan talking points that promote direct orders. This can be as simple as sharing how delivery really helped your business stay afloat in a difficult time with a mention of the best way to order from you.

Converting Customers

You've transformed your delivery approach using elements of digital hospitality. You've leveraged local and social media to advocate for direct orders. Now it's time to lure orders that come in via app with tempting offers designed to make sure that, next time, they call you directly or place an online order. When you think of every third-party delivery order as an opportunity to convert a customer, how can you do things differently?

Minerva gives customers who order more than $50 worth of food directly from the restaurant a free bottle of wine -- "a good bottle of wine too," he explains, one that retails for $30 in the restaurant. Orders that come in through third parties receive a paper menu and a coupon for the wine deal. This way, customers who chose the apps find out what they've missed!

Delivery is new for Minerva, who estimates that before the pandemic, Scottadito was doing one delivery order a night. Like so many restaurants, Scottadito migrated to delivery out of necessity. Scottadito takes orders over the phone and through the website, which connects to an online ordering platform. The restaurant is also active on several third-party delivery apps. "It's not good to have the third parties. It's not profitable, it's just done for exposure," Minerva says. Aside from the fees, he's noticed that orders that come in over the delivery apps tend to be smaller than dine-in orders. Customers are not getting wine or cocktails, nor are they ordering coffee and dessert. To Minerva, giving away a bottle of nice wine is worth it if it means getting a customer to order directly from the restaurant and at a certain price point.

Kelly recalls a New York pizza restaurant that gives free garlic knots to every customer that orders directly from the restaurant. This client places stickers that advertise the special deal on the pizza box and mentions it on the receipt. "The Uber Eats drivers don't see it because it's on the inside of the box... He makes sure every time something is sent out through a third party it has a message like 'order on this website and get free garlic knots.'"

Free offers are a great way to encourage direct orders. At minimum, Kelly suggests including a menu, sticker, or other asset with every order that says "did you know we have our own online ordering site?" This can be paired with a handwritten note and placed inside the order box or bag, so the delivery driver never sees it.

Kelly also recommends placing pamphlets in each delivery order "that encourage customers to follow you on social media, sign up for a newsletter, or contact you in some other way." If a customer takes the step to sign up for your newsletter or follow you on social media, "this allows you to advertise directly to them, and converts them from being a customer of the third-party delivery app to being one of your customers," she explains.

When a customer receives a coupon and a nice note from you thanking them for their business, they may be more likely to order directly from you instead of through the apps. By using a special coupon code for each third party, you can track how many customers from a specific delivery app converted to order directly from you.

There's a lot of talk about third-party delivery services as inherently good (saving restaurants in the pandemic) or inherently bad (charging sky-high commissions). Ciancio encourages independent operators to think of third-party delivery apps in more of a neutral way, as a customer acquisition channel. These apps can introduce you to new customers for a fee -- your commission per order. Since you know the commissions these apps charge, you understand the acquisition cost of gaining a customer via DoorDash or UberEats. When you know what keeps customers on the apps, you can improve your online ordering experience to rival theirs while investing in your brand. You can track coupon codes, social media posts, and other efforts to see what pays off, then double down on what works to increase customer loyalty, increase profitability, and protect your bottom line.

Putting 3PD to Work for You

Think about digital housekeeping, advocacy, and customer engagement as a marketing flywheel. You can put the third parties to work for you, drawing on their reach to lure new customers into your pipeline. However, the apps themselves are always attracting new customers. You have to keep doing your part to encourage direct orders. Calendars or checklists can encourage you to be consistent with your approach.